Protecting and understanding your individual or your business wealth and assets is an important part of overall financial health. In order to help you accomplish this Magnuson, McHugh and Company offers business valuation services. A valuation, also sometimes called a business appraisal, can play a key role in helping your Coeur d’Alene or North Idaho area business achieve financial goals.
Common situations that often require a valuation include, but are not limited to:
- Selling a business or other transactional purposes
- Obtaining financing
- Planning for a merger or acquisition
- Shareholder buy-out or buy-in
- Stock options plans
- Corporate planning
- Developing an estate
- Gift tax reporting
- Insurance claims
What is your business worth?
It’s a common question and the answer can be needed for a variety of situations. One thing is for sure though, there is no one way to establish what a business is worth. That’s because business value means different things to different people and a business valuation is how you get to the answer. This formal process informs a business owner or a shareholder of the value of their interest in the business.
A business can take many different forms, as well as hold a variety of assets or perform a variety of services. Our team will use the information provided by your business to give a professional opinion of the value of your company.
The first steps are to determine the standards of value and the premise of value for the requested business valuation. Standards of value include fair market value, investment value and intrinsic value. The fair market value establishes the value of the business determined between a willing buyer and a willing seller, both considered to have full knowledge of all the relevant facts and neither compelled to conclude a transaction. The investment values address the value of the business to a particular investor or investors. Intrinsic value measures the business value, reflecting the investor’s in-depth understanding of the company’s economic potential.
The premise of value involves the going concern, asset assembly, asset disposition, liquidation, in-use and in-exchange. Going concern assumes the business will continue in it’s station as an ongoing enterprise. Assets can be valued for this in place, but not being used to conduct business. They can also be considered for value in the situation where they may be disposed individually and not used for business operations. Liquidation is understood to be the value when business assets are going to be disposed in a forced liquidation. In-use value is when the asset would provide maximum market value to the parties involved through it use in combination with other assets as a group. In-exchange is when the asset would provided maximum value to the parties on a stand-alone basis.
As you can see, valuation can be complicated and requires a keen understanding of accounting, finance, and economics and that is why we have specially trained professionals that perform our business valuations. This brief overview is just a snapshot of what business valuation involves. The tested methods and approaches our team at Magnuson, McHugh and Company go into much more in-depth. We invite you to meet with one of our specialists to learn more.
Are you ready to get a professional business valuation from local, trusted professionals? Then contact one of our Coeur d’Alene and North Idaho area specialists below or call us at 208.765.9500.
BUSINESS VALUATION SPECIALIST
Chris Harrison, CPA
Chris Harrison graduated from Washington State University in 2003 and joined Magnuson, McHugh & Company shortly after. His areas of focus are planning effective tax strategies for our clients, business valuation work and management consulting.
Chris is married, and you will usually catch them biking or running around town with their children. Outside of work and family, Chris enjoys being actively involved in the community through serving on the boards of Dirne Health Center and the North Idaho Centennial Trail Foundation. He was a founding member of the Kootenai County Young Professionals and has served on several other boards and community groups.